Asia – Mobile Voice Market – 2013 Release

This Asia market report covers 35 countries in North, South, South East and Central Asia. The theme of the report is mobile deployment and development, particularly focusing on voice application for mobile use.

Moving quickly past 3 billion mobile subscribers, Asia sees voice services remaining dominant for the time beingMobile markets in Asia continued to experience strong growth during 2012 and into 2013, despite many countries in the region having subscriber penetrations of over 150%. Asia is home to some of the fastest growing telecommunications markets in the world. Growth across the region in mobile subscribers was in excess of 15% overall in 2011 and was estimated to have been about 8% in 2012 to reach a regional total of 3.3 billion mobile subscribers by year-end. The substantial growth levels have been particularly obvious in China and India, with their huge populations. These two countries alone account for over 32% and 28% overall market share in the Asia region respectively; or a massive 60% combined. It is not just the regional presence either; with China and India's mobile subscriber numbers they also dominate the global mobile landscape, with seven operators in the top 10 ranking of subscribers worldwide.

There is still room for further significant growth right across the various markets of the region, with growth of 10% overall anticipated in 2013. In those countries with large populations and relatively low penetration rates (at least by the standards of developed markets), such as India, China, the Philippines, Pakistan, Vietnam and Indonesia, we can expect further expansion and at a reasonably rapid rate. In the more mature markets such as Japan, Taiwan and South Korea, mobile numbers will continue to ease upwards at a small percentage rate. Growth across the region is being driven by a variety of factors, including government investment to drive the economy; infrastructure building after years of neglect or to fix the after-effects in war torn countries, and also major foreign investment.

Voice services remain dominant in the Asian mobile market. This is despite the fact that right across Asia we have seen a transition to new generation mobile platforms. With the roll out of 3G and 3G+ networks, there has certainly been a shift from mobile voice to mobile data. But by 2012 Asia had an estimated mobile broadband penetration of less than 15%.

In the developing economies of the region quick and easy mobile uptake has been and still is the preferred, and often only, option for subscribers, exacerbated by low fixed-line deployments. These countries also offer investors the promise of continued growth of the mobile infrastructure and subscriber numbers. While subscriber growth and market share is important in the developing economies, there comes a point where the venture must result in profits. Operators still face the huge challenge of trying to prevent ARPU slide as mobile services spread to poorer parts of the population and voice services remain the major share of revenue. To an extent, a large customer base will help to offset low spend by subscribers on voice services. But it is inevitable that operators will be looking to new non-voice services to help boost revenue.

Within the markets themselves, as already noted China and India have been the standout performers. China had close to one billion mobile subscribers entering 2012; by year-end the number was estimated to have increased to more than 1.1 billion. In other words, an annual growth rate of 13% meant large numbers of additional subscribers; in this country of 1.4 billion people, penetration in China reached around 82% by end-2012. This growth is likely to continue for at least a few more years with both China Mobile and China Unicom expecting to see incremental growth from the less well-penetrated rural areas.

In the meantime, India, having been somewhat in the shadow of China, was finding itself close on China's heels coming into 2012. There is still a significant potential for expanding the population coverage in India with over 15% of the population residing in areas with no mobile coverage. It had come as no surprise when India's mobile numbers grew by 17% in 2011 to reach 894 million; the national subscriber base had grown to 934 million by June 2012. However, India saw its total mobile subscriber base go into decline in the second half of 2012, falling dramatically to 865 million by year-end. A major reason for the decline was the move by operators to delete inactive mobile subscribers from their databases. One operator, Reliance, for example, deactivated those subscribers that have not used their phones in two months, shedding 20 million subscribers in July alone.

As the Asian mobile market continues to grow at a healthy rate overall, it remains a market based largely on voice services for the time being. As already noted some markets in Asia have moved rapidly to mobile broadband and advanced data services but the predominant service in the majority of the region's markets is mobile voice for the moment.

Data in this report is the latest available at the time of preparation and may not be for the current year.